Cleveland-Cliffs Beats Q3 Earnings Estimates and Raises Full-Year EBITDA Outlook
Cleveland-Cliffs Inc. (NYSE:CLF) delivered adjusted earnings of 28 cents per share for the third quarter, topping analyst expectations of 19 cents per share. Revenue reached $5.612 billion, falling short of the consensus forecast of $5.724 billion, while total steel shipments rose to 4.2 million net tons. Adjusted EBITDA reached $612 million, surpassing internal guidance of $575 million and expanding significantly from $286 million recorded in the prior quarter.
The strong performance was driven by higher realized selling prices, growing shipment volumes, and reduced unit costs. At its Stelco unit, solid demand for Canadian hot-rolled steel supported results, though persistent market oversupply in Canada's galvanized steel sector led the company to indefinitely pause galvanizing operations. The steelmaker plans to shift Stelco's focus back to hot-rolled steel to preserve production and maintain approximately 2,000 jobs.
Looking ahead, management projected fourth-quarter adjusted EBITDA to reach approximately $715 million, anticipating that firmer pricing will help cushion seasonal downtime and operational cost pressures. The company intends to use free cash flow and property sale proceeds for substantial debt reduction in the fourth quarter, aiming for a net debt-to-EBITDA ratio below 2.5 by mid-2027 and annual adjusted EBITDA exceeding $4 billion in 2027.
Key points
- Adjusted earnings came in at 28 cents per share, surpassing expectations of 19 cents per share.
- Quarterly revenue reached $5.612 billion, missing consensus estimates of $5.724 billion.
- Adjusted EBITDA reached $612 million, topping company guidance of $575 million.
- Management forecasts fourth-quarter adjusted EBITDA of approximately $715 million.
- The company indefinitely paused galvanizing production at Stelco due to market oversupply in Canada.
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Did Cleveland-Cliffs beat earnings estimates for Q3?
Yes, Cleveland-Cliffs reported third-quarter adjusted earnings of 28 cents per share, beating analyst estimates of 19 cents per share. However, revenue of $5.612 billion missed the consensus estimate of $5.724 billion.
What is the fourth-quarter outlook for Cleveland-Cliffs?
Cleveland-Cliffs expects fourth-quarter adjusted EBITDA of approximately $715 million, up from $612 million in the third quarter. Stronger pricing is expected to partially offset seasonal maintenance outages and higher costs.
Why did Cleveland-Cliffs pause galvanizing lines at Stelco?
Cleveland-Cliffs indefinitely paused Stelco's galvanizing lines due to persistent oversupply in Canada's galvanized steel market. Stelco is shifting focus to hot-rolled steel to protect overall production and jobs.